The International Committee of the Red Cross says Syria is now in a state of civil war, a definition it suggests could change the rules of engagement in the violence-ravaged country and help lay the ground for war crimes prosecutions.

The announcement came hours after a senior Syrian official denied government forces had committed a massacre in the town of Tremseh on Thursday, and rejected a UN claim that the regime had led the attack with heavy weapons and helicopters.

Meanwhile, there was further fierce fighting in Damascus that residents said was the worst yet to hit the capital in the uprising against Bashar al-Assad.

The UN returned to Tremseh on Sunday for a second day of investigations into what took place there during a series of clashes, on what is being cast by activists as one of the 17-month-long uprising's bloodiest days. Residents claim close to 150 people were killed in about seven hours of shelling followed by a ground assault. They say they have not yet been able to recover some bodies from nearby fields.

On Saturday UN investigators in the town found pools of blood in homes and spent bullets, mortars and artillery shells, but said the attack appeared to have targeted specific groups and houses, mainly those of army defectors and activists.

Credit: Guardian Graphics

A Syrian foreign ministry spokesman, Jihad Makdissi, said on Sunday that 37 people had been killed in an attack concentrated on five homes. He alleged that most of those killed were rebels, whom he classed as "terrorists".

Damascus has consistently branded all armed opponents terrorists and claims that Tremseh had been infiltrated by jihadi fighters from outside Syria.

"This was not a massacre," Makdissi told a press conference in Damascus. "It was a military operation. Helicopters were involved in surveillance only."

Residents of Tremseh presented a different picture. They claimed that the small farming town, 15 miles north-west of the city of Hama, was targeted because it opposed the regime. Three residents contacted by telephone denied that the opposition guerrilla force, the Free Syrian Army, had a strong presence there, though they acknowledged that fighters had arrived to defend the town on Thursday afternoon.

Facts are becoming ever more bitterly contested in Syria as the stakes rise for all sides invested in the uprising.

The attack on Tremseh marks the third time since late May that a rural town close to an Alawite community – the ethnic group from which the regime draws its power base – has been attacked. Damascus blamed terrorists for the previous attacks on Houla and Mazraat al-Kabir, but in all three cases, residents insist they were attacked by state troops and pro-regime Shabihamilitia after being shelled for many hours.

Clashes have increasingly become two-way in many flashpoint areas of the country, including Homs, Hama and Idlib, where rebel forces – aided by a steady trickle of defections and smuggled weapons – are involved in daily skirmishes against dedicated regime forces.

In Damascus, activists said on Sunday that the Syrian army had closed down the road to the airport and was trying to surround fighters in southern neighbourhoods such as al-Tadamon and Hajar al-Aswad in an attempt to crush unrest inside Damascus.

The fighting spread to al-Lawan, a neighbourhood on the south-western outskirts of the capital.

"There are hundreds of fighters in Damascus right now. We'll see what happens," an activist in the capital told Reuters by Skype. He asked not to be named. "If the regime is able to crush the fighters in Tadamon, the clashes should stop, but if not they may spread further."

The ICRC ruling marks a significant moment in the Syrian uprising, which during the past year has changed from a series of anti-regime protests into a full-blown insurrection. It had previously said that localised states of civil war existed in Homs, Hama and Idlib. The ICRC is considered to be a guardian of the Geneva convention, which prescribes the rules of warfare. The declaration signals that the Geneva-based organisation regards all civilians and detainees as protected under international law.

Alexis Heeb, an ICRC spokesman in Geneva, said: "Now there are many places in Syria that fulfil requirements to be a called a non-international armed conflict, and the situation is fluid and constantly evolving.

"What matters is that humanitarian law applies across the country, and that means civilians and those no longer taking part in the conflict are protected."

Meanwhile, on the diplomatic front, the UN special envoy to Syria, Kofi Annan, will travel to Moscow this week for talks with senior Russian officials, including Vladimir Putin. In the wake of the attack on Tremseh, Annan said he was "shocked and appalled" at the violence, which had taken place shortly after he had held a meeting with Syrian leader, Bashar al-Assad, with the aim of kickstarting the peace plan he conceived in April.

Russia, a key stakeholder in the Syrian crisis, along with Iran, has given mixed signals on how to resolve the situation, at times suggesting it is not wedded to the notion of Assad remaining in power. On Sunday Moscow today again reiterated its position that a resolution must come from within Syria.

Members of the Syrian National Council opposition group came away from Moscow last week without any concessions from the long-term ally of Damascus, which has twice used a veto at the UN security council to stymie western condemnations of the Assad regime.

Moscow has suggested it would again veto a move mooted by the US and some European states for sanctions on Syria.